Attorney Sentenced to Prison for Investment Fraud Conspiracy

Attorney and Real Estate Developer Sentenced to Prison for Investment Fraud Conspiracy
U.S. Attorney’s Office  -  May 08, 2012  -  District of New Jersey  -  (973) 645-2700
TRENTON, NJ —Two New Jersey real estate developers were sentenced today for their roles in an investment fraud conspiracy that embezzled nearly $1 million in connection with purported commercial real estate developments, U.S. Attorney Paul J. Fishman announced.  Allen Weiss, 60, of Marlboro, New Jersey, was sentenced by U.S. District Judge Anne E. Thompson in Trenton federal court to 27 months in prison; co-conspirator David Moulakis, 55, of Toms River, New Jersey, was sentenced to 12 months in prison. Both men previously pleaded guilty before Judge Thompson to informations charging them with conspiracy to commit wire fraud.  According to documents filed in this case and statements made in court:  From January 2009 to February 2010, Weiss and Moulakis conspired with each other and others in a scheme to embezzle investment funds they raised in connection with purported commercial real estate developments, including professional service locations for physicians in Holdmel, Hazlet, and Neptune, New Jersey. As part of their fraudulent scheme, Weiss, Moulakis, and others solicited new investors through promises of high returns and fictitious guarantees on investments and assured existing investors that their investments were secure through fraudulent account and mortgage documentation. Weiss, Moulakis, and their co-conspirators embezzled nearly $1 million in investment funds, using the money to fund their personal expenses. None of the real estate sites associated with the purported project were ever developed.  In addition to the prison terms, Judge Thompson sentenced Weiss to five years’ supervised release and Moulakis to three years’ supervised release; the two men were also ordered to pay total restitution of $1,348,808.  U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, for the investigation leading to today’s sentences.  The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Office Economic Crimes Unit in Newark.  This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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Developers sentenced in NJ investment fraud scheme
The Associated Press  -  May 8, 2012

TRENTON, N.J. — Two real estate developers are headed to federal prison for their roles in a scheme to embezzle funds from investors in commercial real estate projects in New Jersey.  Sixty-year-old Allen Weiss of Marlboro received a 27-month sentence Tuesday, while 55-year-old Toms River resident David Moulakis got a one-year term. Both had previously pleaded guilty to complaints charging them with conspiracy to commit wire fraud.  Prosecutors say the men conspired with others between January 2009 and February 2010 to embezzle nearly $1 million in investors' funds that were supposed to be used to develop projects in Holmdel, Hazlet and Neptune.  Weiss also was ordered to serve five years supervised release once he's freed from prison, while Moulakis got three years supervised release. They also must pay $1,348,808 in total restitution.